I'd be okay with this, if there was some way in PeeWee they can come up with some kind of leeway in incidental contact - they can't continue to call 2 mins for body contact because they bump shoulders fighting for the puck and the little guy falls down. What's that teaching them?

An actual thrown body check? Sure, penalty. An accidental full on body check? Doesn't matter, penalty. One kid makes a great play taking away the puck, but bumps the other kid, let it go.